Victorian state school teachers have voted to escalate their industrial action, at a huge stop-work meeting in Melbourne.

Up to 40,000 teachers went on strike, forcing around 400 schools to close for the day, as part of their pay dispute with the State Government.

About 15,000 teachers and support staff filled Rod Laver Arena, where they voted for a series of work bans and rolling stoppages in term four.

They will not walk off the job during the VCE exams.

The teachers then marched to the State Parliament.

Catholic school teachers also took part in the strike, defying an order from Fair Work Australia.

The Australian Education Union has rejected the Government's offer of a 2.5 per cent pay rise with performance bonuses.

Union state president Mary Bluett says there have been no talks since the last strike in June.

She says there will be more strikes next year if the Government does not reach an agreement with teachers.

"Come the end of the year, if there is no agreement, teachers will implement, from the start of next year, a 38-hour week," she said.

"No out-of-hour duties will be carried out by teachers during that campaign and [there will be a] further 24-hour stoppage on Valentines Day, February 14 next year."

Ms Bluett says teachers will not agree to performance-based pay.

"It sends a very, very strong message to the Premier that he's got to negotiate, and the most resounding response from the meeting when the question was put, do you want performance pay? And that was more than a resounding no.

"They are absolutely determined that their profession is not going to be divided."

Premier Ted Baillieu says the Government will not increase its pay offer.

"There is nothing new in the industrial rhetoric nor the industrial action that's been taken today," he said.

"The only thing that's been achieved today is to disrupt students, to disrupt families and to disrupt schools."

Port Melbourne Primary School principal Peter Martin says he and his staff had little choice but to take part in the strike.

"The only way we're going to get salary justice in Victoria is by taking this action," he said.

"It's a very difficult decision for all of us, our loyalty's to our children, but we've also got to look at where our education's going to go in the next five years. If we don't take this action now I think there'll be long-term damage to education in Victoria."

The Workplace Relations Minister Bill Shorten says it is only a matter of time before the State Government gives in to the teachers' demands.

"I believe it is inevitable that the teachers will get a better deal. Teachers don't become teachers so they have to have days like today," he said.

"But when you force people with nowhere else to go and they take industrial action as a last resort, the Baillieu Government needs to buy a mirror and have a good look at its own behaviour here."